First, cash’s popularity was examined by each study but from two different perspectives. The Cardtronics’ 2016 Health of Cash Study asked about cash use, and 89 percent of respondents reported using cash in the past six months at a brick-and-mortar store. On the other hand, the Federal Reserve study looked at the number of consumer transactions – including those done online – and found that 32 percent were made with cash, outranking debit and credit cards, checks and other methods such as mobile wallets.

Regardless of the two different perspectives, the conclusions were the same: cash is the single most popular payment method.

Diverse Users

As
far as what age or economic groups prefer cash, conventional wisdom did not
apply in either study. For example, the
common assumption was that because millennials and those younger are
tech-savvy, they would be all about Apple Pay and Venmo. On the contrary.

Cardtronics
found that 55 percent of millennials used cash and a digital payment app in the past six months, and that 31 percent reported using cash more frequently now than they did in the previous year. In the same vein, the Federal Reserve study revealed that “those in the 18 to 24 years category included the largest share of people who prefer cash, at 38 percent.”

On the other end of the spectrum, the Federal Reserve study also found that among those ages 45 and older, at least 30 percent of their payments were made with cash.

Choices, Choices, Choices

Both studies also reported that cash was one of a number of payment methods used that included debit and credit cards, checks and mobile wallets and other digital methods. Cardtronics found that it’s the ability to choose among this blended mix of payment options that consumers especially embrace. In our study, 91 percent of consumers said they like the ability to pay with a variety of methods.

The
Federal Reserve study picked up on another type of variety: the merchant category or spending category
where consumers use cash. The categories
they looked at were diverse: from gifts
and transfers to people, to purchases for food and personal care items and
entertainment and transportation.

What did the Federal Reserve determine? “Cash is the most used payment instrument in six of nine merchant categories.”

It’s the Little Things

A fourth area of similar findings between the Cardtronics and Federal Reserve studies is the connection between the use of cash and the dollar value of transactions.

The Cardtronics study found that 80 percent of people use
cash for low-expense items and use other forms of payment for more expensive
items. Specifically, 72 percent use
cash for purchases under $10 and 54 percent use cash for purchases under
$20. Again, the Federal Reserve had
similar findings: Cash was used for more
than 50 percent of purchases under $25, and for more than 60 percent of
purchases under $10.

However, the Federal Reserve went even further and examined whether the use of cash for inexpensive purchases was driven by merchants’ non-acceptance of cards or minimum purchase requirements. Based on information from participants in its study, the Federal Reserve concluded, “Consumers are using cash for small-value transactions out of convenience, not merchant-specific pressures.”

The Bottom Line

No matter how you measure it or what your perspective is, cash continues to be in play – and to be a big player in today’s blended mix of payment options. But, despite that fact, one thing is for sure – the payments pundits will keep questioning the status of cash.